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It would buy you some some 2,100 Rolls Royce Phantoms. Or 200 million mosquito nets to fight malaria. Or the whole of the New York Times company (with $50m change to spare). If you are Microsoft, it buys you some 800 AOL patents to fight the next patent war.

Facebook boss Mark Zuckerberg choose to spend $1bn on Instagram, a small web start-up just under two years old, with 13 full-time staff who work on a single smartphone app.

The business model

Yes, Instagram is very popular. The app's fancy "filters" give your photos a lovely vintage feeling, a bit like the faded Polaroids tucked away in the drawers of your parents' living room. They port mediocre photos into an alternate universe where they look kind of good; an online service allows users to share their pictures with friends.

The drawback, of course, is Instagram's business model. The company has no revenue to speak of. Maybe its business model was to be bought by another tech firm with too much money in the bank.

So is this the return of silly money to Silicon Valley? Is it a case of panic buying, with valuations pushed up in a bidding war with Google or another competitor?

Facebook is certainly not spending $1bn on an app.

Rather, it is buying three things: a potential rival with a rapidly growing user base; a weapon to fight other even bigger threats in the social networking space; and most importantly a better hook into the world of mobile computing.

One user = $28

Instagram's growth is impressive indeed. The app has some 30 million iPhone users. A week ago it launched on Google's Android operating system and chalked up five million downloads in just six days.

Still, it suggests that Facebook values an Instagram user at about $28.

Cheap, you might say, given the fact that Facebook has a much-touted valuation of $100bn - or $118 per user (Facebook's listing on the Nasdaq stockmarket is imminent).

Well, at least Facebook has revenue and is making a nice profit.

Facebook's problem, though, is the fact that its days of rapid expansion are over, and that many see Facebook as something that's done on an old-style desktop computer.

This is where Instagram comes in. The app's strength - mobile devices - is Facebook's biggest weakness. The social network simply has not got the same traction on smartphones as it has on desktop computers. This is an Achilles heel. The number of phones with web access is already outnumbering computers, and sales of tablet computers could soon outpace those of traditional PCs.

Another YouTube deal?

Don't forget that pictures were at the heart of Facebook's success; the easy sharing of pictures made it stand out against early rivals. Today, the social network is the world's largest photo-sharing website.

Combine Instagram's mobile appeal with some careful Facebook integration (without annoying existing users too much), and Mark Zuckerberg could have made a very nifty move. It could be as clever as Google buying YouTube for $1.65bn in 2006, before it was totally obvious how important web video would become.

Buying Instagram could also help Facebook to fend off new rivals like social photo-sharing website Pinterest, which is arguably the world's fastest growing social network yet (albeit still smaller than Instagram, with currently about 20 million users).

Facebook will have to tread carefully, though. Instagram users are a passionate bunch, and already they worry that their app will go the way of many other clever online services that were swallowed by tech giants like Google and Yahoo: quickly sidelined, forgotten and closed down.

Mark Zuckerberg promises to be different, and says he is "committed to building and growing Instagram independently".

The winners

The biggest winners of the Facebook deal are, of course, the people directly involved with Instagram.

Founder and chief executive Kevin Systrom has reportedly netted $400m; his co-founder Mike Krieger is about $100m richer - all for just under two years' worth of work.

Reports suggest that $100m will be shared out among the other 11 members of staff, some of whom joined the company just a few weeks ago.

And then there are the investors, a roll call of Silicon Valley greats (including Facebook's first chief technical officer).

Kudos, by the way, to the three venture capital firms that reportedly invested $50m in Instagram, valuing the company at just $500m. In less than a week they've doubled their money.

Mind Games: Sometimes a White Coat Isn’t Just a White Coat

If you wear a white coat that you believe belongs to a doctor, your ability to pay attention increases sharply. But if you wear the same white coat believing it belongs to a painter, you will show no such improvement.

So scientists report after studying a phenomenon they call enclothed cognition: the effects of clothing on cognitive processes.

It is not enough to see a doctor’s coat hanging in your doorway, said Adam D. Galinsky, a professor at the Kellogg School of Management at Northwestern University, who led the study. The effect occurs only if you actually wear the coat and know its symbolic meaning — that physicians tend to be careful, rigorous and good at paying attention.

The findings, on the Web site of The Journal of Experimental Social Cognition, are a twist on a growing scientific field called embodied cognition. We think not just with our brains but with our bodies, Dr. Galinsky said, and our thought processes are based on physical experiences that set off associated abstract concepts. Now it appears that those experiences include the clothes we wear.

“I love the idea of trying to figure out why, when we put on certain clothes, we might more readily take on a role and how that might affect our basic abilities,” said Joshua I. Davis, an assistant professor of psychology at Barnard College and expert on embodied cognition who was not involved with the study. This study does not fully explain how this comes about, he said, but it does suggest that it will be worth exploring various ideas.

There is a huge body of work on embodied cognition, Dr. Galinsky said. The experience of washing your hands is associated with moral purity and ethical judgments. People are rated personally warmer if they hold a hot drink in their hand, and colder if they hold an iced drink. If you carry a heavy clipboard, you will feel more important.

It has long been known that “clothing affects how other people perceive us as well as how we think about ourselves,” Dr. Galinsky said. Other experiments have shown that women who dress in a masculine fashion during a job interview are more likely to be hired, and a teaching assistant who wears formal clothes is perceived as more intelligent than one who dresses more casually.

But the deeper question, the researchers said, is whether the clothing you wear affects your psychological processes. Does your outfit alter how you approach and interact with the world? So Dr. Galinsky and his colleague Hajo Adam conducted three experiments in which the clothes did not vary but their symbolic meaning was manipulated.

In the first, 58 undergraduates were randomly assigned to wear a white lab coat or street clothes. Then they were given a test for selective attention based on their ability to notice incongruities, as when the word “red” appears in the color green. Those who wore the white lab coats made about half as many errors on incongruent trials as those who wore regular clothes.

In the second experiment, 74 students were randomly assigned to one of three options: wearing a doctor’s coat, wearing a painter’s coat or seeing a doctor’s coat. Then they were given a test for sustained attention. They had to look at two very similar pictures side by side on a screen and spot four minor differences, writing them down as quickly as possible.

Those who wore the doctor’s coat, which was identical to the painter’s coat, found more differences. They had acquired heightened attention. Those who wore the painter’s coat or were primed with merely seeing the doctor’s coat found fewer differences between the images.

The third experiment explored this priming effect more thoroughly. Does simply seeing a physical item, like the coat, affect behavior? Students either wore a doctor’s coat or a painter’s coat, or were told to notice a doctor’s lab coat displayed on the desk in front of them for a long period of time. All three groups wrote essays about their thoughts on the coats. Then they were tested for sustained attention.

Again, the group that wore the doctor’s coat showed the greatest improvement in attention. You have to wear the coat, see it on your body and feel it on your skin for it to influence your psychological processes, Dr. Galinsky said.

Clothes invade the body and brain, putting the wearer into a different psychological state, he said. He described his own experience from last Halloween (or maybe it should be called National Enclothed Cognition Day).

He had decided to dress as a pimp, with a fedora, long coat and cane. “When I entered the room, I glided in,” he said. “I felt a very different presence.”

But what happens, he mused, if you wear pimp clothes every day? Or a priest’s robes? Or a police officer’s uniform? Do you become habituated so that cognitive changes do not occur? Do the effects wear off?

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